(a) (1) Notwithstanding any other law, including, but not limited to, Sections 11011 and 14670, except as provided in this section, the Department of General Services may lease real property under the jurisdiction of a state agency, department, or district agricultural association, if the Director of General Services determines that the real property is of no immediate need to the state but may have some potential future use to the program needs of the agency, department, or district agricultural association.

(2) Except as provided in paragraph (4), the Director of General Services shall not lease any of the following real property pursuant to this section:

Terms Used In California Government Code 11011.2

  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • State: means the State of California, unless applied to the different parts of the United States. See California Government Code 18
  • state agency: includes every state office, officer, department, division, bureau, board, and commission. See California Government Code 11000
  • Subdivision: means a subdivision of the section in which the term occurs unless some other section is expressly mentioned. See California Government Code 10
  • Trustee: A person or institution holding and administering property in trust.

(A) Tax-deeded land or lands under the jurisdiction of the State Lands Commission.

(B) Land that has escheated to the state or that has been distributed to the state by court decree in estates of deceased persons.

(C) Lands under the jurisdiction of the State Coastal Conservancy or another state conservancy.

(D) Lands under the jurisdiction of the Department of Transportation or the California State University system, or land owned by the Regents of the University of California.

(E) Lands under the jurisdiction of the Department of Parks and Recreation.

(F) Lands under the jurisdiction of the Department of Fish and Wildlife.

(3) Except as provided in paragraph (4), a lease entered into pursuant to this section shall be set at the amount of the lease’s fair market value, as determined by the Director of General Services.

(4) Notwithstanding paragraphs (2) and (3), the Department of General Services may lease real property under the jurisdiction of a state agency, department, or district agricultural association, with the consent of that state agency, department, or district agricultural association in support of broadband infrastructure deployment to connect unserved or underserved locations in the state, at an amount less than fair market value, if the following conditions are met:

(A) For last-mile broadband infrastructure deployment projects, the Public Utilities Commission gives consent and makes a written finding of the public benefit for each lease entered that is below fair market value.

(B) For the state middle-mile broadband network authorized by Section 11549.52, the Department of Technology gives consent and makes a written finding of the public benefit for each lease entered that is below fair market value.

(C) The lease terms enable the state to recover all direct costs for the term of the lease.

(5) The Director of General Services may determine the length of term or a use of the lease, and specify any other terms and conditions that are determined to be in the best interest of the state.

(b) The Department of General Services may enter into a long-term lease of real property pursuant to this section that has outstanding lease revenue bonds and for which the real property cannot be disencumbered from the bonds, only if the issuer and trustee for the bonds approves the lease transaction, and this approval takes into consideration, among other things, that the proposed lease transaction does not breach a covenant or obligation of the issuer or trustee.

(c) (1) All issuer- and trustee-related costs for reviewing a proposed lease transaction pursuant to this section, and all other costs of the lease transaction related to the defeasance or other retirement of any bonds, including the cost of nationally recognized bond counsel, shall be paid from the proceeds of that lease.

(2) The Department of General Services shall be reimbursed for any reasonable costs or expenses incurred in conducting a transaction pursuant to this section.

(3) Notwithstanding subdivision (g) of Section 11011, unless necessary to maintain the operating reserve referenced in that subdivision, the Department of General Services shall deposit into the General Fund the net proceeds of a lease entered into pursuant to this section, after deducting the amount of the reimbursement of costs incurred pursuant to this section or the reimbursement of adjustments to the General Fund loan made pursuant to Section 8 of Chapter 20 of the 2009-10 Fourth Extraordinary Session from the lease.

(d) The Department of General Services shall transmit a report to each house of the Legislature on or before June 30, 2011, and on or before June 30 each year thereafter, listing every new lease that is below fair market value or exceeds a period of five years entered into under the authority of this section and the following information regarding each listed lease:

(1) Lease payments.

(2) Length of the lease.

(3) Identification of the leasing parties.

(4) Identification of the leased property.

(5) For any lease to support broadband infrastructure deployment, a description of the related broadband infrastructure project to connect unserved or underserved locations in the state.

(6) Any other information the Director of General Services determines should be included in the report to adequately describe the material provisions of the lease.

(e) For purposes of this section, “unserved” and “underserved” locations shall be as specified on the state broadband map maintained by the Public Utilities Commission or in broadband infrastructure grant programs.

(Amended (as amended by Stats. 2023, Ch. 45, Sec. 14) by Stats. 2023, Ch. 485, Sec. 1. (SB 387) Effective January 1, 2024.)

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